Our approach to the new Energy Efficiency Regulations

In England and Wales, landlords must ensure their properties have an Energy Performance Certificate (EPC) rating of ‘E’ or higher - this applies to properties where there are existing tenants, as well as properties where a new tenancy is being created.

The rules for properties in Scotland are different - for more information, read our approach to the Energy Efficiency Regulations.

You can also check that your property has a valid EPC by using the services below to find the energy certificates for your property.

For an England and Wales energy performance certificate here
For a Scotland energy performance certificate here

Below are the full details of the TMW Energy Performance Certificate (EPC) valuation policy:

Purchase and remortgage applications (including Porting) This will reveal additional content

In accordance with the Minimum Energy Efficiency Standard Regulations, valuers are unable to recommend the property as a suitable security where no valid EPC exists or it has been rated as ‘F’ or ‘G’.

However, the property can be reconsidered if a compliant EPC (A-E rating) can be submitted or where proof of a valid exemption can be provided.

Exemption details can be found at Domestic Private Rented Landlord Guidance.

Further advance applications This will reveal additional content

For further advances on a property where no valid EPC exists, the Valuer will be unable to recommend the property as a suitable security. The property can be reconsidered once a valid EPC is provided.

Where a valid EPC exists, a rating of ‘F’ or ‘G’ will only be accepted where the sole purpose of the additional borrowing is to fund improvements to make the property compliant, i.e. ‘E’ rated or above.

The Valuer will assess the EPC data and detail any works needed to bring the property to a minimum ‘E’ rating in the valuation report. The costs of any works will be reflected in the valuation figure. A condition will be placed on the mortgage offer confirming the works must be undertaken within 3 months. The Mortgage Works reserves the right to reinspect the property 3 months after completion to ensure the works have been carried out.

As per current retention policy, the application can proceed where the cost of work is no more than:

£2,500 (for properties with a current value of up to £100,000)
£5,000 (for properties with a current value over £100,000)

A full retention will be applicable if the cost of the work exceeds the values above.

The maximum loan and LTV will be calculated on the purchase price or the figure before the work whichever is lower.

For portfolio applications the valuation policy detailed here will only apply to the subject security of the new application. We won’t currently assess EPC ratings on wider portfolio properties held with other lenders.

Post completion lending criteria This will reveal additional content

Whilst landlords must still comply with new regulations, there is no change to our valuation policy for post completion contract variations, such as transfer of equity, conversions or term amendments (however, please see above for porting applications).

Scottish properties This will reveal additional content

Scottish regulations will not require all properties to let to have an ‘E’ rating until 31 March 2022.

Purchase, remortgage and further advance applications (including Porting)

The Mortgage Works will continue to lend on properties with an EPC rating of F or G. However, the Valuer will assess the EPC data and detail any works needed to bring the property to a minimum ‘E’ rating in the valuation report.

The costs of any works will be reflected in the valuation figure. A condition will be placed on the mortgage offer confirming the works must be undertaken within 3 months, unless your client sends us proof of a valid exemption or an updated EPC prior to completion. Exemption details can be found at Domestic Private Rented Landlord Guidance.

The Mortgage Works reserves the right to reinspect the property 3 months after completion to ensure the works have been carried out.

As per current retention policy, the application can proceed where the cost of work is no more than:

£2,500 (for properties with a current value of up to £100,000)
£5,000 (for properties with a current value over £100,000)

A full retention will be applicable if the cost of the work exceeds the values above.

The maximum loan and LTV is calculated on the purchase price or before works figure, whichever is lower.

On purchase applications where an EPC record isn’t available to the Valuer, they’ll be unable to recommend the property as a suitable security and we’ll request evidence of EPC details or exemption from you or your client.

As part of any further advance or remortgage with capital raising application, for example to purchase or refurbish another property, we’ll expect your client to carry out the works required to bring the security asset up to a minimum ‘E’ rating.